AEW UK Long Lease REIT has raised £80.5m in its initial public offering after announcing an intention to raise up to £150m in mid-May.
After fees, net proceeds from the listing were £78.9m, the REIT said. The cost of the setting up the new REIT, at £1.6m, was 2% of the total capital raised.
AEW announced in May that the new REIT intended to invest in a range of sectors under-represented in institutional portfolios, including leisure, healthcare, education, hotels, student accommodation, supported living and automotive. It intends to build a portfolio with a weighted average unexpired lease term in excess of 18 years, with 85% of rent inflation-linked.
The new REIT is not alone in targeting the alternatives sector. Nick Leslau’s Secure Income REIT owns £1.6bn of hospitals, hotels and theme parks let on long leases, while the £138m LXI REIT was launched in February. A number of UK institutional funds also concentrate on longer leased alternative stock.
AEW UK Investment Management is the investment manager for the fund, part of AEW Global, which has more than €60bn of assets under management.
Steve Smith, chairman of the company, said: “We are pleased with the response we have received to our initial public offering from both institutional and retail investors. We believe our strategy of investing in sectors that are under-represented in institutional portfolios is a strong one, and we are now well placed to capitalise on our strong pipeline of current investment opportunities.
“The support we have received from our new shareholders is testament to the management team’s expertise and experience, and we look forward to delivering the secure, diversified and sustainable income return that our investors are seeking.”
Fidante Capital is acting as sponsor, financial adviser and sole bookrunner to the company.
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